You want to know the amazing reward for collecting all 120 shine's? If you beat the final boss again after collecting 120 shines, instead of the picture at the end with the dude spinning with the paintbrush thing, you get a picture with all teh Island inhabitants. Thats it. I know, its almost too good to be true...
btw, I have 91 shines, and they are becoming a real pain in the ass to get...